When it comes to investing in the pound in FX trading, it is said that while you can make a lot of money from market trading, it is high risk, highly liquid, and highly gambling-like. This is because the pound’s price movements are quite dramatic. Therefore, when you can make a profit, you can make it, but when you lose, you often lose a lot. That is why the pound is called the killer currency.
Pound is a killer currency
Those who trade the British pound should be careful because it is highly volatile. It moves violently, so if it moves in the right direction, it’s OK, but if it moves in the wrong direction, it can be irreversible. If you don’t have the knowledge beforehand, you will lose your assets. This time, we will explain the information about the risks involved in making money in Japan.
Not suitable for beginners
There are various currency pairs of the pound, but overall the volatility is extremely high and the price movements are flashy, so it is not suitable for beginners. If a beginner suddenly does a pound, it will go backwards greatly, and it is often the case that the entire amount is lost while worrying about when to stop loss. Therefore, trading the pound is very dangerous unless you get used to it.
person who cannot cut losses
Pound is not recommended at all for those who can not easily cut losses. The pound fluctuates wildly, so if you hesitate to cut losses even for a moment, you could end up in a terrible situation. This is because those who cannot cut losses will have a high probability of losing all their money. However, you can still make a profit if you stick to it.
How high is the volatility?
If you look at the latest, there has been a sudden surge, so those who were fighting with the decline should have suffered a lot. If this is the euro dollar or dollar yen, the price movement will not be so intense.
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Best timing for pound
As mentioned above, the pound is very gambling, so the risk is also high, but depending on the timing, it is highly recommended. Specifically, the pound has the widest price range when the market is as follows.
range market
In a range market, basically no movement occurs in any currency pair. Pound is recommended in such a case. Because you can get more price range than other currency pairs. Even if it is a range, you can trade with confidence because you can get a certain amount of price range.
one-sided trend market
From 2021 to 2023, the Japanese yen continued to sell unilaterally. This kind of one-sided movement was quite rare in the exchange market. However, when there is an overwhelming trend market like this time, if you buy and sell in pounds, you can win very easily because it will be carried without permission.
GBP/JPY or GBP/USD
The pound-dollar is among the most popular currency pairs in the exchange market. For that reason, compared to the pound yen, price movements are relatively less likely to occur. Compared to that, the pound yen tends to be more intense. However, this is also a trend, and it is not always the case, so be careful.
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Points to note when trading the pound
As mentioned above, the pound is characterized by its very high volatility compared to other currency pairs. Therefore, if you make a mistake, you can suffer a huge loss. As a result, you may leave the EU. Since Brexit, the price movements in the financial sector have been intense, and many people are now losing money by starting. Please consider the trading volume and other factors when considering the environment.
keep the lot down
Compared to the euro and the US dollar, the pound is characterized by its volatile price movements. Try to keep the lot size as small as possible when trading. The UK economy is also unstable, making it somewhat difficult to win in the service.
Drop positions during economic indicators
The pound is more volatile than the euro and the US dollar. When it comes to economic indicators, there is a big movement, so if there is a possibility of making a big profit, there is also a possibility of a big loss. It is better not to do it during economic indicators as much as possible.
get used to price movements
If you want to trade in pounds first, practice trading. The pound is very volatile and dangerous. Until you get used to it, do not increase the lot and trade small.
Recommended XM
XM was originally known as a forex company with too wide spreads. But this was only recently. Now there is an account type called KIWAMI account. The spread is very narrow and very suitable for trading. Therefore, this account type is highly recommended. Especially for those who trade in pounds, it is recommended because the spread is extremely narrow.
KIWAMI | Standard | Zero | |
USDJPY | 0.7pips | 1.6pips | 1.1pips |
EURUSD | 0.7pips | 1.7pips | 1.1pips |
GBPUSD | 0.7pips | 2.1pips | 1.2pips |
AUDUSD | 0.9pips | 1.8pips | 1.4pips |
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